GAFFEY v CHIEF COMMR OF STATE REVENUE

Members:
Young J

Tribunal:
Supreme Court of New South Wales

MEDIA NEUTRAL CITATION: [2000] NSWSC 403

Decision date: Judgment given on 16 May 2000

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Young J

The plaintiffs' summons in these proceedings says that they appeal pursuant to s 96 of the Taxation Administration Act 1996 from a decision of the defendant of 19 July 1999 whereby he purportedly disallowed the plaintiffs' objection against his refusal to reassess land tax and in particular the refusal of the defendant to act so as to provide a refund of land tax paid.

2. However, when one looks below the surface, the matter in dispute is not particularly well described in the summons.

3. At all material times, the plaintiffs were the taxable proprietors of land at Cherrybrook. They were assessed for land tax in respect of the 1987-1999 land tax years. Had the plaintiffs made application under what is now s 9A of the Land Tax Management Act 1956 (the ``Land Tax Act'') at the appropriate time, the probabilities are that they would have been entitled by virtue of that section to postpone payment of part of the land tax that was assessed for those tax years. This is because they would have been entitled to an ``unutilised value allowance''. Under the scheme of the Land Tax Act (which has changed a little over the years, but not materially), when the property is sold the last five years worth of postponed land tax are payable to the Office of State Revenue. The Land Tax Act provides for tax postponed for more than five years to be written off.

4. No application was made to the Chief Commissioner to postpone any part of the land tax until 1999. The Chief Commissioner obliged with respect to the tax years 1996 and onwards, but took the position that he had no authority to touch the assessments of land tax for 1995 and previous years. It is against that position that the plaintiffs seek review by this Court.

5. The case raises considerable technical problems and there are, of course, decisions to be made on the merits. I was assisted by Mr David Raphael who appeared for the plaintiffs, and Dr Holger Sorensen who appeared for the Chief Commissioner. Dr Sorensen took the position that if his client succeeded on the merits, there was, as far as his client was concerned, little purpose in pressing the technical objections. What I will do is first, deal with the merits of the matter and then, as the Chief Commissioner succeeds on these, deal with the technical objections relatively summarily.

6. The assessments under review fall into two groups:

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• (A) Those made before Act No 84 of 1992 changed the format of s 9A, namely the assessments for the land tax years 1987 and 1992 inclusive; and
• (B) Those assessments made after the format of s 9A was changed, namely those for 1993 and 1994 land tax years.

7. For the years in group (A), s 9A of the Land Tax Act, so far as is relevant, provided:

``9A(1) Where land tax is leviable and payable... on land which... is used or occupied solely as the site of a single dwelling-house and is the subject of a determination... of the attributable part of the land value as referred to in section 160C of the Local Government Act, 1919, as amended..., the person liable to pay such land tax shall upon application to the Chief Commissioner be entitled to a postponement of the payment of that amount by which the land tax assessed would have been reduced had the amount obtained by multiplying the attributable part by the equalisation factor applicable to the land been excluded from the assessment of such land tax.''

8. There was no determination of the ``attributable part of the land value as referred to in s 160C of the Local Government Act 1919'', at least before 1999.

9. The Chief Commissioner's principal argument is that the scheme of s 9A permits postponement of part of the land tax only where:

• (a) land is occupied solely as the site for a single dwelling house;
• (b) land is the subject of a determination of the attributable part; and
• (c) an application is made to the Chief Commissioner during the relevant tax year.

10. Dr Sorensen puts that semantic significance must be given to the word ``is''. Unless at the time when land tax is leviable there is an attributable part listing of the land, then the section cannot operate. As there was not such a listing, there was no right to postponement.

11. Although it is necessary to look at the scheme of the Land Tax Act, it is convenient first to focus on the word ``is'', a word employed several times in s 9A in its pre-1992 form.

12. The word ``is'' in its most common use indicates an immediately present situation:
Public Trustee v McKay [1969] NZLR 995, 1001. However, as McCarthy J pointed out in that case at 1002, the use of the present tense does not necessarily focus on a point in time because it is quite customary to use the present tense as though the past, and indeed the future, were present such as ``the steamer leaves every Tuesday in winter''. The word ``is'' is also often used in a continuous sense, such as ``where the court is satisfied'' of something, referred to as the ``continuous present'' by Gee J in
Penza and Penza (1988) FLC ¶91-949 at 76,858. Occasionally the word can have a past significance such as in
Hargreaves v Hopper (1875) 1 CPD 195, where the Act gave the vote to a person who ``is on the last day of July in any year'' a person who possesses the prescribed qualifications. The word can mean ``shall be'' or ``will be'':
Botts v Simpson 167 P (2d) 231, 233 (1946) (Cal);
Jersey City v Flynn 70 A 497, 510 (1908) (NJ Chancery). Sometimes the word has no temporal significance at all:
Pye v Minister for Lands NSW [1954] 1 WLR 1410, 1425. See generally
Darkingung Local Aboriginal Land Council v Minister for Natural Resources (1985) 58 LGRA 298.

13. In all cases it is a matter of looking at the word in context. It seems to me that in the present context, the word ``is'' plainly refers to the land tax year in question, particularly the time when the Chief Commissioner is considering the liability for land tax on land owned on 31 December of the previous year. Unless the land has an attributed part value from the Valuer General at that time, then the section is not applicable.

14. As to the two assessments in group (B), the Land Tax Act was changed so that instead of the Valuer General making an assessment of attributable value, a person is entitled to a postponement of part of his or her land tax ``If there is an unutilised value allowance entered in the Register''. Section 62J provides that certain land is eligible to have an unutilised value allowance ascertained. Section 62K provides that the owner of land may apply to the Chief Commissioner for an ``unutilised value allowance'' to be ascertained in the prescribed form. The allowance ascertained by the Chief Commissioner is then to be entered in the

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Register ``and is to be shown in any assessment to which it is applicable''.

15. Again, the word ``is'' is employed. For the same reasons as before, the section only applies if at the relevant time there was an entry in the Register of an ``unutilised value allowance''. There was no such entry with respect to the current land at that time.

16. Accordingly, on the merits the taxpayer is not entitled to a postponement of land tax in any of the years under review.

17. The technical points are thus unnecessary to decide. However, I will briefly deal with them because it may be that there is an appeal from this decision and the appellate court may be assisted by a brief consideration of them.

18. The appeal purports to be under s 96 of the Taxation Administration Act 1996 (the ``1996 Act''). Section 86 of the 1996 Act provides that a taxpayer who is dissatisfied with a decision of the Chief Commissioner under a taxation law, may lodge a written objection. Section 91 imposes a duty on the Chief Commissioner to consider the objection. Section 96 gives the taxpayer a right to appeal to the Supreme Court. Both s 86(2) and s 96(2) indicate that apart from the appeal under the 1996 Act, no court or administrative review body has jurisdiction to consider reviewing an objection.

19. There is a question as to whether this s 96 applies at all. All of the assessments for land tax were made before the 1996 Act came into force. Schedule 1 of the 1996 Act deals with transitional provisions. Clause 16 of the Schedule makes it clear that Part 10 (Objections and Appeals), in which ss 86 and 96 appear, applies only to a notice of assessment or a decision of the Chief Commissioner served after the commencement of the 1996 Act. Otherwise the appeal is in accordance with the provision of the relevant tax Act that existed at the time of the assessment.

20. Clause 3 of the Schedule provides that an assessment made under a taxation law before the commencement of Part 3 of the 1996 Act is taken to have been made under that Part except as provided by clause 16(2).

21. Broadly speaking, this would mean that for all purposes other than appeals, after the 1996 Act one deals with an assessment of tax as if it were an assessment under Part 3 of the 1996 Act.

22. The significance of this is that s 9 of the 1996 Act prohibits the Chief Commissioner from making any reassessment more than five years after the initial assessment unless all the relevant facts and circumstances were not fully and truly disclosed. The proviso is inapplicable here so the Chief Commissioner has taken the point that even if he wished to, he cannot make a reassessment.

23. However, in my view the present case has nothing to do with assessment at all. The assessments were perfectly well made. All that has occurred is that there has been no postponement of the liability to pay part of the tax. Thus, in my view, s 9(3) of the 1996 Act has no bearing on this case.

24. Returning to the method of appeal, the plaintiffs say that the Chief Commissioner made a decision after the 1996 Act commenced and accordingly, attracts the Objections and Appeals Part of the 1996 Act (Part 10).

25. Dr Sorensen says that ``decision'' in s 86 does not cover every position taken or ruling made by the Chief Commissioner and the position taken not to postpone the payment of any land tax is not a ``decision''.

26. Dr Sorensen referred in this connection to a series of cases decided under the Commonwealth Administrative Decisions (Judicial Review) Act 1977 (the ``ADJR Act''), particularly
Brownsville Nominees Pty Limited v FC of T 88 ATC 4513; (1998) 19 FCR 169. With respect, I do not find these particularly useful because the definition of ``decision'' in the ADJR Act provides the context for those cases and in any event, the decision in the Brownsville case has been severely criticised in later cases, particularly by the Full Federal Court in
Right to Life Association (NSW) Inc v Secretary, Department of Human Services & Health (1995) 56 FCR 50.

27. There is no definition of ``decision'' in s 86 of the 1996 Act. It is clear from the context that the decision must be one which is ``under a taxation law'' but especially in view of the privative clauses in ss 86 and 96 to which I have drawn attention, it would seem to me that the word ``decision'' should be fairly widely construed. I consider that the words of Lindgren J in the Right to Life case at first instance, which was approved by the Full Court, where his Honour said (see 56 FCR 50) that a decision was:

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``an ultimate or operative determination which an enactment authorises or requires and thereby gives... statutory effect''

are a good guide.

28. In the present case, I consider that what the Chief Commissioner did met this test. He determined that he was not able, even if he wished to, to postpone as a result of an application made in 1999, the payment of land tax under earlier assessments.

29. Where a person approaches a public official to make a ruling on a matter pursuant to a taxation law and the person approached declines to do so on the basis that he or she has no jurisdiction, that to my mind, is a decision. It is quite clear that if a person dealing with a matter within his or her competence rules that he or she has no jurisdiction, that is a decision which may be reviewed; see eg
Ex parte Hulin; Re Gillespie (1965) 65 SR (NSW) 31.

30. Accordingly, in my view there was a decision made after the 1996 Act commenced which could be the subject of an appeal.

31. I want to guard myself from being thought to have held that if anybody approaches the Chief Commissioner to reconsider an assessment or ruling and the Chief Commissioner declines to do so, that that necessarily constitutes a decision. It would be quite contrary to the whole spirit and intendment of the 1996 Act which limits time for appeals to permit people to get a fresh decision by asking the Chief Commissioner to review something and the Chief Commissioner declining to do so. What makes the current situation a decision is that, removing all its technicalities, the taxpayer was saying to the Chief Commissioner: ``We should have made application to postpone part of our land tax years ago but were ignorant of our rights. Please now adjust the matter'', and the Chief Commissioner has taken the view that he was unable to do so. That was the first time the point had been brought before the Chief Commissioner for a ruling and he, by taking the position he did, to my mind made a decision. This, however, is a relatively special case and must not be taken to have provided authority for that wider proposition which I have just noted.

32. It should be noted that unlike the ADJR Act, the failure to make a decision is not specifically caught up by the term ``decision''. If under the ADJR Act a public official is asked to make a ruling and has a duty to make a ruling, and unreasonably delays in making a ruling, then there is a decision which can be reviewed. If that ever happened under the 1996 Act, it would not seem to me that there had been a decision within the meaning of s 86 of that Act. However, if there was a duty to make a decision and no decision was made, the privative clauses of ss 86 and 96 would not apply and the Chief Commissioner would be subject to mandamus (see
Ex parte Burrows (1906) 6 SR (NSW) 606) or would be subject to an order under s 65 of the Supreme Court Act 1970.

33. I think there is little point in dealing with what might have been the situation had I held that there was no decision in the present case. This would have meant considering whether any of the appeal rights under the Land Tax Act in the form that existed before 1996 could be activated or whether the Chief Commissioner had failed to carry out a public duty so that a mandamus or an order under s 65 of the Supreme Court Act could be made.

34. In my view, the appeal should be dismissed on the merits. The plaintiffs should pay the costs of the appeal. The Chief Commissioner's cross-claim should be dismissed. I would make no order as to the cross-claim because really the points that were involved on the cross-claim had to be argued on the appeal in any event.